I contributed the max amount for 2023 to a personal IRA account ($7,500). It was the last entry I entered to best understand the impact on my refund. It only increased my refund by $16.00. Historically the impact has been much more. Trying to understand why it was only a $16.00 and if there's an error?
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Yes, that's a surprising result, but there are reasons that can happen.
Usually, a deductible IRA will increase your refund by the percentage of the contribution that matches your tax bracket. For example, you are in the 25% bracket, you contribute $7,500, and your refund increases by $1,875 ($7,500 x 25%).
Here are some reasons why it may not work that way sometimes:
Thank you. Helpful information.
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